What is utilization review and when is it required? 
Utilization review is the evaluation, by an outside source, of the necessity, appropriateness, efficiency, and quality of medical care services provided to an injured employee. 

Utilization review is required:

When the medical necessity of a recommended treatment is disputed or when otherwise required by the workers’ compensation statutes or medical fee schedule (e.g., hospital admissions, physical or occupational therapy, chiropractic care, clinical psychological treatment). 

The "UR" system provides for:

Review of selected outpatient and inpatient health care providers; and 
Pre-admission review of all hospital admissions, except for emergency services.

Utilization review is required in every case where the medical necessity of a recommended treatment is disputed.

Utilization review services must be provided or contracted for/by:

Each insurer who provides workers' compensation insurance in Tennessee.

Every self-insured employer.

The insured employer may choose to provide the services on its own or through a third party administrator.

The UR Agent conducting the review services must be registered with the Division of Workers’ Compensation.

Please note that the adjuster can not deny a recommended treatment but has three business days after being notified of the recommended treatment to authorize the treatment or send the recommendation to its utilization review agent.  The recommended treatment can only be denied by an Advisory Medical Practitioner (an actively TN-licensed practitioner, who is board-certified and in the same or similar general specialty as the authorized treating physician).  Recommended treatments may be approved by a registered nurse or an Advisory Medical Practitioner.  Utilization Review Agents may employ or contract with individual Advisory Medical Practitioners and registered nurses.

The utilization review agent has seven business days to make a decision on the recommended treatment and notify all parties of the decision. If the utilization review agent does not possess all necessary information in order to render the utilization review determination, then they shall request additional information in writing from the authorized treating physician, who shall comply with the request within five business days of receipt of the written request. The seven business days are tolled until the utilization review agent receives the necessary information or until the five business day timeframe expires, whichever occurs first. The decision shall only address medical necessity and not causation and/or compensability.  An approval of the treatment by the utilization review agent is final and not subject to appeal.

Any denials of recommended treatment must be accompanied by a utilization review report that gives the reasons for denial and contact information for the utilization review physician.  Denials must also be accompanied by an utilization review appeal form (Form C-35A) so that the injured worker and treating physician are informed of the proper procedure to request an appeal with the Department.   After a denial, the injured worker, their attorney or treating physician has 30 calendar days from receipt to appeal the utilization review decision to the Department at the address listed on the form.  Once a complete medical record is received, staff provides a copy of the record for the Medical Director’s review.  The Medical Director determines if he agrees or disagrees with the utilization review decision.  If he disagrees with the utilization review decision, an order for the treatment as recommended by the authorized treating physician will be issued.

A copy of the Department’s Utilization Review rules, Chapter 0800-02-06, may be found at http://www.tn.gov/sos/rules/0800/0800-02/0800-02-06.20091112.pdf and the appeal form (Form C-35A) may be found at http://www.tn.gov/labor-wfd/forms/c35a.pdf.

A health care provider who is found to have rendered excessive or inappropriate services may be subjected to:

Forfeiture of the right to payment for the services rendered;
Payment of civil penalty of up to $1,000;

Temporary or permanent suspension of the right to provide medical care services for workers' compensation claims.

An employer, insurer, third party administrator, or UR Agent who is found to have violated the UR rules may be subjected to a penalty of not less than $100 nor more than $1,000 per violation.  The Division may also institute a temporary or permanent suspension of the right to perform utilization review services for workers’ compensation claims, if the utilization review agent has established a pattern of violations. 

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